How do you feel about services like Xbox Live Arcade, where Microsoft is selling games directly to the consumers and bypassing retail?
BM: We view digital distribution as another channel of opportunity for the consumer. We provide the consumer with choices, and as long as we're on an equitable distribution model with those choices, we just consider them another competitor. We're not afraid of competition; we know that there are certain limits within that model. Actually, we've engaged digital distribution within our own website. There are PC games that are downloadable from GameStop.com.
There was a point a few years ago where it looked like everything was going to go to e-commerce. We actually opened some of our stores branded as GameStop.com. Actually, this year we've gone through the rebranding process, and by the end of September, 80% of our stores will have a GameStop storefront for the consumer to see a common look to our stores.
So is EB being phased out now?
BM: Yes, that is part of the strategy. A couple of years ago, during the holidays, we had five different brands.
The bags had four logos on them for a while.
BM: Yeah. Now that we've evolved, the company is at a position where we really want to focus on taking this to a new direction, and taking it into a common direction. Not only for the consumer, but for our associates as well.
Speaking about small publishers, recently some niche titles have become GameStop exclusive games. How do you build those relationships, and choose those games? What opportunities do you see there?
BM: I think those opportunities will continue to exist. There are a lot of creative individuals that have small development companies, and they try to find their way into the market either through a distributor, or most of our merchandise we buy directly from the publishers.
This provides a small startup company a good opportunity to get in with us and present their product, if they are having trouble finding another distribution channel. Or maybe they get in through a bigger publisher, like Atari, that does a lot of affiliated relationships. Electronic Arts takes in smaller publishers as well. I think there are opportunities, not only within the small publishers, but within some of the larger publishers as well. Last year, for example, with Square we had an exclusive version of Final Fantasy XII. That was an exciting opportunity for our stores and the consumer.
There also seems to be a lot of pre-order bonuses that have come along for GameStop, and there's a passionate audience there, that is going to want to spend ten extra dollars to get a bonus. Is that something that comes from you guys, or comes from the publishers?
BM: It is really a partnership with our publishers. I would say that the majority of the time, our merchant group is helping to drive that. We have a good idea of what the bigger titles are that are coming, and it's easier to start those conversations if the vendors aren't coming to us with them initially and offering up something unique that will help differentiate our consumer.